Winter Haven First-Time Homebuyers interested in receiving their $8,000 from the US Government should be on the lookout for form 5405, better known as the First-Time Homebuyer Credit Form.
As is often the case with tax-related paperwork, this tax credit form contains a mere 10 fields yet is accompanied by 3 pages of instructions.
In truth, these pages are not a total waste of tree-matter, as Form 5405 does provide some good basic information about the tax credit and how to claim your $8,000.
For example, the form helps you understand the difference between tax consequences for homes bought in 2008 versus 2009, and clearly defines the term "first-time homebuyer." Another useful feature is found in Form 5405's explanation of the math behind the tax credit. In general, the First-Time Homebuyer Credit is equal to the lesser of:
- $8,000 for homes bought in 2009
- 10 percent of the home's purchase price
Nota Bene: Married couples who file separately will receive half of the expected credit. Also, if you sell your home before the stated 3 year holding period is up, you will be required to repay the credit. Look for language dealing with your home as references as your "main home" for clarification on this.
Form 5405 is a comprehensive reference. However, please be sure to check with your local tax and mortgage professionals to be sure you do in fact qualify for this credit and that you understand how the First-Time Homebuyer Credit may impact your finances. When you're dealing with your money, folks - there is no substitute for professional, paid advice.
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